July 20, 2017

SB 700 would have funded storage incentives over 10 years.
It disappeared from the Assembly’s schedule without a vote.

A long-term energy storage rebate that cleared the
California Senate came to a sudden halt in the Assembly this week.

SB 700 would create a 10-year rebate program that
steps down in phases as storage penetration increases, modeled after the
successful California Solar Initiative. It was slated for a hearing
Wednesday in the Assembly's Utilities and Energy Committee, but the committee
chair took it off the agenda despite objections from the bill's author.

The bill is still alive, but it can't be passed until the
legislative session next year due to Assembly rules.

The procedural move to delay the bill without a vote has
left industry stakeholders irked.

"The utilities blocked SB 700, plain and simple, by
getting the chair to hold the bill in committee and denying it a hearing,"
said Laura Gray, energy storage policy adviser for the California Solar Energy
Industries Association. "They see distributed storage as an even bigger
threat than standalone solar."

The Utilities and Energy Committee Chair, Assemblymember
Chris Holden from Pasadena, pushed back on that explanation in a statement
emailed to GTM.

"To suggest that the perspectives of the utilities
affected the treatment of this bill is a simplistic statement," he said.
"It avoids the substance of the issues surrounding further development of
storage in California, which is a leader around the world in the work we have
done thus far."

The California Public Utilities Commission has called for a
study on the growth of the storage market based on state policies enacted so
far, he added.

"I look forward to continuing the work on SB 700 when
we see the results of the study,” he said.

Freshman Senator Scott Wiener authored the bill, one
of a
few clean-energy-related efforts he has led since arriving from the
San Francisco City Council in January. SB 700 passed the Senate in May on a
vote of 23-13.

Wiener said he was disappointed with the bill's removal from
the agenda before it could be discussed.

"The importance of a public hearing is that the public
can see what’s going on," he said. "You can receive public comments
on the bill, and members of the committee can make an informed decision to vote
up or down."

The bill had garnered a coalition of backers, thanks in part
to its language around impacts on low-income communities. Residential storage
remains expensive, with limited avenues for payback in most U.S. markets. The
technology has mostly reached well-off households that can afford to be early adopters,
prompting one storage executive to critique the industry as selling "fancy
boxes to rich dentists."

The bill includes a carve-out for 30 percent of the
funding to go to low-income communities. Supporters include clean energy
industry groups like CALSEIA, but also organizations like the California
Environmental Justice Alliance and the California Housing Partnership
Corporation.

The bill’s delay marks a setback for energy storage
advocates who had hoped to solidify a long-term funding plan for the
technology. It does not mean the industry will go without incentives, however
-- the Self-Generation Incentive Program is funded through 2019.

The SGIP rebates, though, "are not sufficient to propel
the market to the next level," Wiener argued in a Senate hearing on the bill.

The California
Solar Initiative was implemented in 2007, with a goal of delivering 2
gigawatts of solar panels on residential and commercial rooftops by 2016. The
program used all of its funding years ahead of schedule and resulted in
hundreds more megawatts of solar being installed than its initial goal.

A similar approach could guide storage technologies down the
cost curve to widespread adoption. But Californians won't know if they should
plan for that until the bill resurfaces in 2018.